Gender earnings gap in urban Pakistan: evidence from ordinary least squares and quantile regressions

Abstract

The objective of this paper is to analyze the gender earning gaps existing in urban areas of Pakistan using data from a household survey. The earning functions have been estimated separately for males and females using Ordinary Least Squares (OLS) as well as quantile regressions including education, literacy, experience, employment related variables such as type of industry and occupation and age as explanatory variables. The earning gaps between males and females have also been analyzed using the Blinder-Oaxaca decomposition method. Results suggest higher mean earnings for males as compared to females but higher incremental returns to investment in human capital for females at all levels of education. Further, higher returns to schooling have also been noted in bottom part of the income distribution i.e. 5th & 25th quantiles for workers of both sexes as compared to those present in the top of the distribution i.e. 75th & 95th quantiles at all educational levels. Education, industry of employment and occupations has been emerged as the main determinants of income gap between male and female workers in urban Pakistan.